The FTC recently installed with Nevada-based owners and operators of a national payday loan company over allegations that the company removed money from consumer accounts without consumer authorization and overcharged consumers in violation of TILA / Regulation Z.
The FTC complaint, filed last year in U.S. District Court for the District of Nevada, alleged, among other things, that the defendants violated FTC law, the Telemarketing Selling Rule, TILA / Z Regulation, and EFTA / Regulation E, by marketing loans with fixed repayment terms and promising consumers that their loans would be repaid after a predetermined number of payments. However, even after repayment of the initial principal of the loans and the stated repayment cost, the company continued to withdraw money from borrowers’ accounts. In many cases, this conduct would continue until the borrowers ask their banks to reject the initiated withdrawal or the borrowers have all closed their accounts.
According to the FTC regulations, the company was “permanently banned from the payday lending industry, including granting loans or granting credits of any kind”, in addition to a monetary judgment of $ 114 million. of dollars to be suspended when transferring all of the company’s deposit accounts to the FTC. Finally, the company must give up any current consumer credit.